The dairy processing industry is vital to the Canadian economy, ranking second in the Canadian agri-food sector. In 2015, the industry employed approximately 23,322 people and generated thousands of jobs in related sectors such as transportation, packaging, handling, and marketing of dairy products. In 2015, the value of products shipped by dairy processors totalled $17 billion, making up 16% of the value of all shipped products in the Canadian food and beverage industry.

Dairy processing plants exist in every region of Canada and are generally located in areas where farm milk production is concentrated. Fluid milk plants tend to be located on the fringe of urban centres to serve the consumer market. Dairy plants manufacturing items with longer shelf life, such as butter, milk powders, cheese, and whey powder, are located in rural areas closer to the raw milk supply.

From a regional perspective, the industry is heavily concentrated in central Canada. Ontario and Quebec account for 69% of all plants. Data from 2014 indicates that Quebec has 193 plants of which 87 are federally inspected, while Ontario had 141 plants, 97 of which are federally-inspected.

Dairy processors in Canada

In Canada, there are two markets for milk: the fluid milk market (milk and table cream) and the industrial milk market (butter, cheese, ice cream, and yogurt). In the 2015-2016 dairy year, about 81.8 million hectolitres of milk were produced for both of these markets. About 29% of the milk shipped by producers was intended for the production of fluid milk and the other 71% was intended for dairy processing.

The following table illustrates milk utilization by class. For a definition of uses for each class, see the Harmonized Milk Classification System. On the basis of butterfat content (3.6 kg/hectolitre), 29.1% of all the milk produced in Canada was transformed into fluid milk, cream and milk beverages, 35.2% into cheese, 7.8% into yogurt and ice cream, and 17.2% into butter.